665 – The Difference Between A Product-Led Versus Market-Led Business

Podcast: Download (Duration: 42:53 — 39.4MB)

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Sonya Keenan

Podcast highlights:

02:55 – When it’s all about the product
05:12 – Some product-led examples
07:12 – Will they buy it?
09:05 – Where is your market?
10:51 – Knowing your customer
13:44 – Identifying channels that work
15:44 – Forget about the features
18:43 – Removing the barriers
22:52 – Building the excitement
25:46 – Zigging when the market zigs
28:11 – Client versus customer
30:35 – Lessons from Mercedes-Benz
33:55 – A car industry takeaway
39:03 – The guy who sold a boat
41:24 – In summary

Optimize your business for success with help from James

Transcription:

James: James Schramko here. Welcome back to SuperFastBusiness.com. This is Episode 665. And I’m chatting with Sonya Keenan, from OmnichannelMediaGroup.com. Welcome.

Sonya: Good day, James, how’re you going?

James: Going really well. I love our chats, you always have a refreshing perspective on things. And that’s because you’re traveling between Australia, the United States, and you’ve got a foot in a few different types of businesses. So, always really interesting to see what you’ve got to say. And today’s topic, I’m sure, will be very exciting as well, because we’re talking about the difference between product-led versus market-led, and how that relates to our business.

Sonya: Yeah, James, as you know, I’ve been coaching business owners for quite a while now. And as you said, I do tend to have my fingers in quite a few pies. I’m a serial entrepreneur, I hope in a good way. I love business, I love being involved in business, and I love sort of building community. And through that coaching work that I’ve been doing, I’ve been really fortunate to work with some really successful businesses and business owners. But what I found is that once I start working with them, we find this whole sort of barrel of untapped potential in their business that they just aren’t marketing to. And that’s their own market. Businesses get so caught up in developing a product, and selling a product, that they just really forget that they have this whole opportunity of serving the market that they’ve built. And yeah, that’s what I want to sort of chat to you about today.

James: Yeah, I love it. When I think of you, Sonya, I know we got connected through some mutual friends, especially through your connections in the DigitalMarketer space. You now run the annual event for digital marketing in Australia, towards the end of the year, which I’ve had the pleasure of speaking at, which is a great opportunity. And I think of you as being gutsy, and a go getter, and you call it like it is, which is why I think we get on so well.

Sonya: Thank you, James, I appreciate that from you, that’s a nice accolade I’ll take.

James: Well, you just, you know, instead of just talking about stuff, you just roll up the sleeves and get it done. And you’re a great implementer, and of all the people I speak to, I can tell who talks the talk, versus walks the walk, and you know, the results are there. You actually get stuff done. I’m wondering if you’ve got an example of a product-led business versus a market-led business that we might be able to relate to.

When it’s all about the product

Sonya: I think when you look at something like some of the online businesses that we see within the communities, particularly info businesses, which is a big buzzword at the moment, building memberships and things like that, often people create that because they have a product. They might have, you know, a training course in how to do SEO, or how to sell something or do something, play the guitar. And so people get caught up in developing their course and their product, and they just start down this path of, it’s all about the product, what platform am I going to put it on? What widgets am I going to add in? How am I going to get my funnels working? How am I going to automate it, and all these different sort of what I call shiny objects. But they never step back and look at what the customer wants. And often, what the customer wants is just a simple solution to the pain point.

If I use that guitar example (I have nothing to do with any guitar businesses, so I’m just making this up), you know, think of learn to play the guitar. All I want to do is learn to play probably a particular song so that I can impress somebody that’s important to me, or it’s a bucket list thing that I want to do. I don’t want all the bells and whistles; I don’t want all the other things that go with it; I just want to fix the pain point of learning how to play a guitar. And probably all I need is some videos that are sent to me via an email that I could watch and go back and rewatch and practice. Whereas, I get businesses that come to me wanting to do that same sort of idea, and they’re so caught up in whether it’s going to be on a membership site, and whether it’s going to have streaming, and whether it’s going to have downloading and whether it’s going to have all these other things. They haven’t actually looked at what the market wants.

And if you’re market-led, not only will you develop the right products, but you’ll develop them in a way that your customers want to consume them. My business is called Omnichannel, because the whole premise of Omnichannel marketing is that we present to our customers what they want from us when they want it, and how they want it. If they want to talk to me on the phone, whether they want to talk to me on email, whether it’s on Facebook, whether it’s via my website, or whether it’s at one of my events, that’s where I am and my message is always the same. So, it’s really about thinking, what does your customer actually need and want from you to solve this problem?

Some product-led examples

James: It’s an interesting concept. As you were relaying that, I’m thinking of a few examples that I’ve had recently. I was coaching someone who has a membership, and she was expressing frustration to me. And in fact, almost anger. When she polled her customers and asked them what they found most valuable, she was really pissed off that some of the things she put a lot of effort into weren’t rated very well by the customer. I think this is a classic example of what you’re talking about, where she’s put a lot of effort, she’s put a lot of thought and gone out and done things – in some cases, what the customers said they wanted, which is, you know, we have to be very careful about that one, because of the preference versus performance effect – and she was upset that the customer didn’t value the things that she put all this energy into, and it was then you have this sunk cost fallacy where it’s hard to remove features. You’ve put a lot of time and effort into what the customers don’t actually want.

Sonya: Yeah.

James: Because you’re thinking, what’s left? Well, I think you’ve answered this. What’s left is what the customer actually wanted in the first place.

Example number two is, I know a customer of mine has a product, which he sells via advertisements through to webinars through to appointments through to workshops in person. And then, you know, around that, the business is built. The business really is built around Facebook ads and in-person sales. That’s the business. But what got lost, really, was the core reason the customer is interested in buying the product, and what the product can actually deliver. And it turned out the product wasn’t as good as it could have been. And that’s where we’ve been focusing, on making a product that will actually be unrecognisably different from what was being sold before, that actually gets the customer a result that solves the biggest challenges they’ve had that were not being met that caused a massive amount of frustration and pain for the customer, that manifested itself in aggravation and feedback that was not nice for the product.

Will they buy it?

Sonya: I think that saying that nothing happens until a sale takes place, you know, this is what is really important, is it’s a difference between what your customers say they want and what they’re prepared to pay for. And as business owners, that’s the difference between, you know, people who have a highly successful business and people who don’t. If you get people to pay you for the things they say they want from you, well, then you’re going to do well. But people will tell you time and time again that they like something, but they’ll not actually buy it.

And even in my coaching work, most people come to me because they say the problem that they have with their business is they don’t have enough traffic to their website. You know, that’s singularly one of the biggest problems. If I could get some more traffic to my website, I would be more successful. And everybody, when I start working with them, I find that there’s a whole lot of other reasons why they’re not getting sales, and it’s got nothing to do with traffic. It’s got to do with how their whole system is set up and how their customer value journey plays out.

And you need to understand how you’re going to be able to give your customers what you want. And so for me, some of my best coaching clients that came to me because they wanted more traffic, I’ve spent my time working with them redeveloping their product, or teaching them how to build an offline sales team to go out and talk to people, because their product was actually a product that didn’t need digital marketing, per se; it needed people to go do sales calls.

And I think what’s happened in the world of digital is we think that digital is the great cure-all for everything in a business. And, you know, that other saying I use all the time is, just because you can doesn’t mean you should. Just because you can build a complex membership site or go out and do a whole lot of advertising on LinkedIn and Facebook and Google doesn’t mean you actually should be for your business; you might be better off having an ad in the local newspaper.

Where is your market?

But it’s this whole idea is, where is your market? If you aren’t where your market is, they’re not going to find you. You know, the word marketing comes from markets, you know, the old-fashioned markets, we used to have a market where we would go and buy our goods or barter or all those things back in medieval times when we first came off the land. And you know, it hasn’t changed. The marketplace is where your customers congregate, and that’s where your product offering needs to be. And how you build it is really just an all fashion shop front, and how you merchandise it and how you style it and how good the product looks. And then how easy is it to consume and does it live up to its taste; people will come back to your market store next week and buy it again. And I think, in business, we’ve just lost that a little bit, we’ve got probably a little bit too clever for ourselves.

James: Yeah, I think there’s people on either side of that curve. I regularly walk past empty shops here in my local neighborhood. It’s almost guaranteed a new shop will go out of business sooner or later in this area, because retail rents are high, and some of the older school businesses have not adapted to the online business.

Sonya: Yes.

James: And I remember when I was working in the Mercedes dealership, running the website, running the marketing, and learning all about Product Launch Formula, running AdWords, and still having a real business that nothing could touch, sending out direct response letters to our customers. Whenever we did a big launch, or any kind of campaign, it wasn’t the 10,000 email addresses that performed the best; it wasn’t the Google ads that performed the best. And it wasn’t the ad on the front page of the North Shore Times. It was the direct response letter with a call to action and a bonus signed by the dealer principal with an invitation that got the actual buyers. Of the buyer’s list, that was the bulk of it. So, it’s a matter of knowing your perfect channel.

Sonya: You’ve got to know your market, yes.

Knowing your customer

James: You’ve got to know your customer. And I think that’s how you’re going to win every time – if you know your customers’ pain points, you know what their aspirations are, you can empathize with them. And that’s why you’re doing what you’re doing and I’m doing what I’m doing in terms of actually meeting people face-to-face. The greatest trap of an online business is to hide behind the keyboard. But you’ve got yourself in that airplane and gone out to conferences. You run conferences, you meet people. I’ve met you face-to-face multiple times. And that’s where the real key to an online business is. It’s getting out and understanding your audience.

Sonya: Yeah, and if you look at where we’re going with how Facebook’s driving us, and even to a point how Google is starting to change now, is it’s all about building community; it’s all about a cause; it’s all about a movement; it’s been all about conversation. And the art of conversation isn’t dead, it’s just changed. And some of us need to be really good at doing those conversations just purely via an email or a messenger bot right through to, as you said, being able to stand on a stage and talk to thousands of people and engage them. And in between those is where every business sits.

It’s just understanding where you sit for your business now, and it’s changed. You know, for me, four or five years ago, I wasn’t standing on stage speaking and traveling overseas and doing these things. It was the last thing I would have thought of doing. But as I’ve developed my connections, and people get to know me, and they asked me to do these things, well, yeah, my community has grown and so has the conversations.

And I think that in business, you have to talk to your customers. But I think there’s a lot of business owners who go out of their way to talk. I mean, that comment you made about the dealerships with the letters, I was with a client the other day that runs some gyms, and they were complaining to me about the fact that email’s not working for them anymore. And I said, “Well, why don’t you send them a letter?” And they said, “What do you mean?” I said, “Have you got their addresses?” They said, “Yes.” “Why don’t you send them a personal card to the people that haven’t been to the gym for a while saying, ‘Hey, Mary, I’ve missed you at the gym, you know, next time you come in, let me know you’re coming, I’d love to catch up.’ I mean, you know your gym members.” And they’re like, “Oh, my God, I’ve never thought of something like that.”

You know, it’s so off-the-wall to send a snail mail letter. But it’s a form of communication that gets cut through now because people don’t use it. Send a letter to a five-year-old or a seven-year-old child and see the response you get. They’re just blown away. It’s just so unusual for it to happen. It’s so special. It’s more special than anything.

So where are your customers, and how do they want you to communicate to them today? But tomorrow, it might be different. So you still have to have all these different channels open. But you have to understand the tone, and you have to understand what sort of information they will accept through different channels, depending on the demographic.

Identifying channels that work

James: And sometimes it takes a while to identify a successful channel. An example of that for me was, one year ago, I started making short videos every day, every business day. And initially, I wasn’t getting many views. And I couldn’t see much in the way of sales coming from that attribution, because we were tracking it in our reporting software. And then one year later, when I looked at the stats, it was really mind-boggling. Those little tiny videos, of which I’d spend one to two minutes, and there was around 300 of them, because we did around about five days a week, it’s about 600 minutes worth of content, which is about 10 hours. And so far, they generated around 20,000 views, 2000 email addresses, 178 customers, and 360 odd transactions, because that’s the same customer billing twice. And they’ll keep billing for another 18, 24 months. That cohort, it’s going to end up being worth about $8,000 an hour to me of effective hourly rate. And that channel took a while to emerge and to show itself. It really took until I ran a campaign to turn that orchard into a crop. It took a while to plant the seeds and grow the trees and get the fruit ripe for me to send out the harvester.

So that’s the other difficulty is the time lag sometimes in these campaigns. And I’ve talked about this a couple of times with Scott Desgrosseilliers from Wicked Reports – the average time for an offer to become profitable is 60 days. So some will take longer. I imagine your gym owner will have huge success from the direct response campaign. I still remember the letter I got from a gym in around about 1991. And I remember it because it was funny. And it said, “We looked under the table. Under the benches. We looked in the locker room, we looked around the side, we just couldn’t see you anywhere. Will you please come back? We’re missing you here at the gym.” And I still remember that letter now. And that is such a long time ago. But it will definitely work even more, because the only letters I’m getting at the moment are from politicians and real estate agents.

Forget about the features

Sonya: Yes. And there’s a perfect example of a segment that doesn’t understand how to play to their market and continues to focus on the product. You know this. If you’re going to be market-led, and you’re going to be talking from that point of view, you have to get yourself out of talking about features and advantages. You have to move into benefits. And the car industry is a great example for that. You know, you don’t sell a car because of the features or advantages – you sell the car because of what it does for the person. How does it make them look? How does it keep them safe? How does it get them from A to B that they can do their job? You know, these sorts of things are how you sell the dream. And I think that in small businesses, we forget that.

If I ask a business owner to tell me the pain point they serve, when I first started working with them, I’ll guarantee you they’ll tell me what their product does. They don’t tell me what it actually does for the customer. And they get caught up in these features and advantages, and all their language is always from the features of the product as opposed to what’s the benefit for the customer. And I challenge any established business owner who has a database that is serving their business quite well to to go back and look at their unengaged part of their database, and just send out a message to them or a series of messages where you focus on a benefit, as opposed to a feature and an advantage. And I guarantee you, you’ll generate revenue. Otherwise, you should just take them off your list. Because at the end of the day, that’s what they’re there for – they’re there for us to grow our business and to nurture it. But we don’t tell people what is actually in it for them. We just assume that they can work it out. And we make it hard for them.

Like, some of the big retailers in Australia, they wonder why they’re failing at internet marketing. And you know, you can’t even get a price on something unless you want to subscribe to their website. You know, that’s not how the market plays; that’s them trying to tell the market how you will use that website. Whereas that’s not how the market accepts you use a website.

So you know, you have to look at all these channels and say, well, how do these channels fit into my business? And then how do I make them work for my customers? And if you keep doing that, you will grow your business, because that customer that you serve is a market probably bigger than the initial product that they bought from you. And this is where you start to scale the lifetime value of a customer, which is what market-led is all about, is lifetime value of a customer. And if you have a customer with recurring income, or you are growing beyond their initial purchase from you, well, the profit in your business is going to skyrocket. Because as we all know, the cost of that first sale is the most expensive, whereas if you’re leading from a market-led focus, you will change that approach over and over again.

James: Yeah, these big retailers, they keep sending me janky brochure-style emails that don’t even format properly in the browser, that have nothing useful at all. It’s pretty much what they would normally stuff in your letterbox. It’s email spam.

Removing the barriers

Sonya: And they don’t understand, they just don’t understand how people use online. One of the retailers, I can’t remember who it was in the story now, in the States during the GFC. It was like, one of the ones that didn’t go under, obviously. And they basically looked at the GFC and saw what was happening with the internet and online shopping and went, hang on, we need to embrace this. And so they put free Wi-Fi in their stores and encouraged people to go online and comparison shop. But because they were in this store, they could market to them and make sure they met the price. And then the other thing they acknowledged was that, because it was the GFC, that people were struggling with credit cards and they wanted to pay cash. And so they did click-and-collect. And at a time when retail sales were going down, they went up, because they met the market. Instead of telling the customer how you will do business with us, they said, how can we do business with our customers and make it easy for them? And that’s, to me, the approach that we have to have in our businesses all the time, is just removing those barriers that we put in place.

And sometimes that barrier can be as simple as a login. You know, there’s nothing more frustrating than having to log into something, to do something, when you don’t actually want to be logged in yet. You know, you’re not actually sure you want to buy, and you don’t want to give them those details. And we make it hard. We get people bounce out. Or the tech is too hard. You know, all these things that are making it harder and harder to do business means that people will just bail out. And that 60-day sort of average that you were talking about becomes 90 or 120, because it takes so much more communication to get that customer across, because we’re not meeting them the way they want to be met.

James: Well, you know, in 2016, I ordered a special surfboard. It was a really amazing, super duper, incredible one. And it was handcrafted by a real legend. And I love that board; it surfs incredibly well. And on the tip of my mind, I kept thinking, I really need to get another one from this guy, just slightly bigger for bigger waves. But they never ever communicate with you, not even once get in touch with their customer base. Instead, they rely on ambassadors, the newspaper, or online video clips. Especially recently, there was a contest, and this particular shaper ended up having the board that was chosen as the best board. And it’s caused a rash of sales. And I was speaking to this guy, because it reminded me. Like, Oh, yeah, that’s right, I really wanted one of those. I phoned him up, had a great chat. He’s a lovely guy. And he said, “Yeah, finally now at this stage in my life…” He’s in his 50s; he’s reaching commercial success for the first time ever, even though he’s been working really hard the whole time. But if he just emailed his customer base, he wouldn’t have had to rely on a competition choosing his board as the number one board. Because people like me would have purchased continually, you know, probably each year for the last three years, would have just kept topped up. And the very best people in this space, they send great educational, story-based dream-painting kind of content. It’s not pushy or aggressive. It’s what people like me want to consume. I want more information on this – I want the video clips; I want to know about surf travel destinations; I want to see the technology behind the scenes; I want to see beautiful pictures of the product on a beach, surfing on a wave.

I think one of the biggest barriers that some business owners have is they’re not actually communicating with their client in any channel, and they’re just relying on luck. And again, they’re probably still thinking a lot about the product, just making the product and hoping for good luck for people to find out about it. It can work for you in the long run, if your product is fantastic. It never hurts to have an amazing product. And I’m sure there’s plenty of great products out there where the marketing is substandard. And I think if you’re going to put your effort into one of the two places between the cover of the book or the material in the book, the biggest yield is going to come for making the cover very compelling.

Building the excitement

Sonya: Yeah. And you know, like your surfboard example there, because you know, I do a lot of work with DigitalMarketer, and I love their tools, and one of their tools is a thing called The Customer Value Journey. And the segment straight after conversion is “Excite”. And we just don’t focus on it. Because we go, oh wow, we’ve got a sale. Great. Let’s make the surfboard and get the surfboard out to James – that’s our job. Whereas, to follow that up with some messaging that reinforces to you why you bought that surfboard, and then gives you some tips on how to look after that surfboard, and then gives you some tips on how to get the most out of that surfboard – before the surfboard arrives, you are absolutely, like, blown away; you cannot wait. It’s like Christmas waiting for this surfboard to arrive.

James: Well, if they take screenshots, you know, what everyone does when they order a custom surfboard, is they go and subscribe to the Instagram channel. And they’re hoping to see a snippet of their board being created. That part of the journey is very exciting. And I remember buying some shirts online, and in between ordering and when the shirts arrived, they sent me picture updates. They showed me them cutting the collar, and sewing the buttons on, of my shirt. And I got to experience the creation of the shirt. By the time it arrived to me, I felt like I already knew the shirt. And I knew that great care and effort had been expended to make this beautiful creation. It’s a lot like Rolex do when they tell you that it takes one year to make a Rolex Daytona. Like, you think about the craftsmanship involved. It builds a lot of value in that product.

Sonya: Oh, definitely. And, you know, after you place your order, that’s when the buyer’s remorse starts to click in. But if you don’t follow that up with why you’ve made the right decision, you know, like, the large fashion online retailers like Net-a-Porter do a brilliant job of, you know, right down to how the packaging on how your articles arrive, and then also how you can return it so easy. And all these things, you know, they’re dealing with the objections, even after the sale, because they know you can cancel and request a refund from PayPal or your credit card or whatever. And that’s understanding your market.

And like, your surfboard guy, he’s only just got to go have a coffee with a few of you guys, and he’s got his marketing plan. And he’s probably taking photographs of the boards anyway, as he’s doing them. So tag the people and you know, that’s a great example for any business owner. What is your photographs of the board being created and posted to Instagram moment for updating your customers?

If you’re a service provider, like a lawyer, or a health practitioner, or somewhere like that, the moment someone books a first appointment, they should receive something that tells them what to expect next. Because there’s fear associated with that, as soon as you employ somebody for service to solve a problem. Yeah, it’s just understanding what your market needs.

Zigging when the market zigs

I’ve been involved with a site called Balance by Deborah Hutton over the last, sort of nearly 10 years. And our market is women over 45. When we started that, like 10 years ago, the woman over 45 was almost computer illiterate, as a cohort. You know, people couldn’t even log into our site, because they were using web browsers that hadn’t been updated for five years, because they were too scared to update them. We very quickly worked out that we had to offer support to get their computer skills up to a point that they felt confident to be on the site. Whereas now, it’s not a problem, because the 45-year-old woman is somebody who’s been using computers for a long time, and it’s on the iPhone, and even the 55-year-old woman is now happy because she’s been using the iPhone forever, and everything’s on mobile.

So, you know, when we first started, 95 percent of our content was consumed on a desktop computer. Now percent of our content is consumed on a mobile phone. So our experience changes of what sort of content we have to be delivering and how we have to be delivering it. But you can’t stand still. It’s a race that is never finished. It goes on, and you have to keep training and adapting as you’re still running the race, otherwise the business will go broke. And that’s where implementation paralysis comes in. You know, that’s where people just get absolutely stuck. Because they’re like, “I’ve been running this race for so long. I should not have to zig, it’s not fair.” And you go, “Well, yeah, I hate to tell you, your market zigged, and so has your competition. So you’re going to have to, too, otherwise you’re going to be out. Your business will be finished.”

And unfortunately, business changes so fast, that if you don’t keep up with it, and don’t keep up with your market, or at least even be slightly ahead of your market, it’s gone. The window shuts and somebody else will give that person what they need.

James: It is like the tectonic plates. They’re always shifting. There will be earthquakes and there’ll be tsunamis. It’s not a stable environment. And you can see that. Evidently, at the moment, you’ve got Facebook now starting to give people the option to charge subscriptions. They’re going to play into this paid content game. And they’re also getting hold over big fines and so forth for behavior. One of the original founders is hoping that they’ll break it up, it’s too much power in the newsfeed, etc.

So you can rely on change. If there’s anything at all, rely on change and adapt. And that’s why conversations like this are good.

Client versus customer

One thing that comes to mind, and I wanted to ask you about, is the difference between Jay Abraham type philosophy where you call a client a client, because they’re under your care, and you serve them, versus the John Warrillow philosophy of call the customer a customer, because you don’t want to have customized individual service requirements. In Built to Sell, he’s talking about productized services, where you take a service and you chunk it into a product. I certainly did particularly well out of that with my SEO business for about seven years – we had a seven-figure business productizing a service into just a couple of packages. And we tried to eliminate customization as much as possible, because I don’t know if anyone who’s ever had a website development firm will relate to this one: customization is just the death for service business.

So where does this fit within the product versus market-led environment, the difference between a client and a customer, and productized services without customization versus customized offerings?

Sonya: Well, I think for me, whether it’s client or customer, both ends of the spectrum, they’re paying you money. And they’re paying you money to solve a pain point. So I have clients in my coaching business, but I have customers in my event business, because my event business isn’t customized. It’s what it is, whereas my coaching business is obviously extremely customized. But as far as being market-led, both offerings are led by how my market needs it. And I think that that’s really, if you’ve got, say, your example of the SEO business where you don’t want to be doing customization, it is what it is. It’s a T-shirt business. You know, you sell these T-shirts, that’s what you’ve got, that come in small, medium, and large. But if you understand the market that that T-shirt is serving, because it’s going after a particular demographic, or a particular type of social people, or it’s, you know, it’s a particular type of T-shirt that’s been designed specifically for the environmentalist, and it’s this and it’s this and it’s this and what this T shirt says about you is that you’re a really cool environmentalist person, well, you’re customizing the message, but you’re not customizing the product. The product is the product. So I don’t know if that really answers your question, but to me, the product or the offering is one thing. That’s the thing of what you do. But how you do it and how you message it and how you connect it to the market, that’s the nuance of it.

James: I like that.

Lessons from Mercedes-Benz

Sonya: Don’t get product-focused versus market-focused, meaning if you’re product-focused, that means you’re only looking at the product and you don’t change, whereas market focus means you will change everything and customize it. That’s not the case. I would say that Mercedes-Benz is a market-focused company. And yes, you can get options on the car, but at the end of the day, it is what it is. It comes in a two-door or a four-door or a hatch; it’s got a roof or it doesn’t; it’s an entry level or it’s not, or it’s got all these add-ons. You know, it seems like it’s customized, but it’s not. It’s actually quite structured in what you can have and when you can have it.

Where the market-led comes into that with Mercedes-Benz is that, if you want a specific car in a specific color, a specific model, and we haven’t got it on store, we can get it for you in six months’ time. But here’s all the things you’ve got to do to do that in six months’ time. So then we’re adding on extra prices, and we’re customizing and getting a premium for doing it. And that’s where being market-led allows you to be more profitable.

James: I think the real story with Mercedes-Benz is they invented the combustion engine vehicle over 100 years ago, and as of now, literally at time of recording, they’ve just won their fifth Formula One with a one-two position for the year. So they are still absolutely dominating at the pinnacle of the consumer focus. People who watch Formula One are passionate about motorsport. They are the winningest team possible with the one and two position in every single race so far this season, yet they’re pretty much the oldest car company around and they’ve had a pretty good streak. It is actually a great product. And I learned so much from working in that.

In fact, a really interesting one, just to reinforce this point. You know, where I’m getting a lot of people say, oh, I want to put together a program, I’m going to do this, this, this and this, they’re always talking about the specs or the deliverables or how they’re going to do it, the logistics, even. But they haven’t mentioned the customer or what the pain point is, or what would solve it most perfectly. They’re just working out the package that they would like to most deliver. So that’s certainly one approach, but maybe not the right one.

And when we’re in the dealership, when someone came in to talk about their motoring needs, we could actually break it down into six separate segments, to have a conversation that was more tuned to the outcome the customer was looking for. You mentioned it before. Like, if you just want transport, you could buy an ebike. If you want to pick up a hot date, then you might be looking at a different type of motor vehicle. If you want to feel good about your decades of achievement and make sure everyone around you knows that you’re clever, then you’re going to get a different kind of transport. But the six different segments that helped us when we were making that sales presentation, tune in to the outcomes that that customer wanted, and they could be six very different outcomes. And depending on which one was important, that’s where we would focus our Pareto principle, you know, all of our efforts there, and ignoring the ones that are least important. Because someone who’s interested in appearance may not hold much weight in how long the car will last. Especially if they change cars like an AMG owner every 18 or 19 months, then they’re never going to have the car long enough to know if it’s durable or not.

A car industry takeaway

Sonya: Well, when I teach features, advantages and benefits, I use the car industry as an example. Because in the 60s, Freud did a study. It was called the SPACE motivators, and it was deployed to understand why in the same dealership did one salesperson do so much better than the other when they’re selling exactly the same cars, exactly the same price, same incentives. And what he came up with was that, a bit like Maslow’s hierarchy of needs, we have a series of emotional bias that we need to meet before we can move on to the next.

And the analogy that I use quickly is, I’m coming into a dealership, I want to buy a car, I’ve decided I want to buy a red car because I’ve read in a choice article that red cars are now the safest, not white cars. So I walked into the dealership, I’ve got my family of four that I want to buy this car for. I walk in, the dealer says “Oh, Sonya, how can I help you?” I say, “I want a red car.” He says, “Well, have I got a red car for you.” He thinks I want a red car because it goes fast, because we all know red cars go faster. So he starts selling me all these red cars based on the fact that they go fast. I don’t want his red cars because I want safe red cars. And if it was in a Mercedes dealership, it would be exactly the same red car, because that red car was also the safest car on the road. But I don’t want his red cars now because they’re not safe. They’re fast.

So security was my number one buyer motivator. The SPACE motivators stand for security, profit, appearance, convenience and ego. And when we’re buying, we have to meet number one before we move on to the other. And good car salesmen understand the first question that they should always ask is, “And why do you want a red car?” “I want a red car because it’s safe.” “Oh. Well, have I got the right red cars for you. They’re safe red cars. They’ve got all these features that make them safe, which means your family won’t die in an accident. But guess what, Sonya? I can see that you’re a woman in your 50s and you probably also would like something with a bit of style. Guess what? These are also sports cars. They’re hidden underneath all the safety.” So appearance looks good, ego looks good. Convenience – “I’ve got it on the showroom floor for you today. You can drive it away and I can help you get the finance sorted. You’re done.” You know, profit-wise, “If that all makes it for you, Sonya, would you like to do this deal today?” You know, that’s how car salesman sell, good ones.

And in our own business, what is our SPACE motivators? Like, what is the thing? Like, online shopping, security – big thing. I’ve got to put my credit card details into your system – how do I know it’s safe? Even if it’s only a $10 T-shirt. Right through to appearance, ego, the convenience (you know, when will it be delivered?). Profit – I know it’s a good price. So if you understand the buyer motivators of your market, then you can make everything fit. Mercedes is a fantastic example of a company that does that. They understand where those different motivators fit in the decision making for the different customer avatars for the different types of cars.

James: It’s funny, me hearing you talk about selling cars. I think they might have adapted that SPACE formula, because we learnt it as safety, performance, appearance, comfort, economy and durability. They were the buyer motivators, very similar. And of course, in my six seed questions that I developed for the sale system that I used, one of the very important questions was, why is this important to you? It’s a values-based question. You don’t want to be presumptive.

Sonya: Never.

James: That’s really the key for any kind of sale – you’ve got to know the prospect. I found an enormous amount of gold in understanding what the person had purchased prior, what do they have now, why did they buy that, and what are they looking to change? Just like a plastic surgeon’s question.

Sonya: Yes.

James: What are they looking to change about their current vehicle gives you big clues, especially if they’ve added a family member. And they say, well, we love the convertible, it just doesn’t fit our baby capsule. So it gives you big clues.

Sonya: Yeah. Exactly. It’s convenience. And if you’ve got an online business selling T-shirts, you need to be able to apply that to your online business selling T-shirts. You know, what is it? Like, what’s the number one reason why people are buying that particular T-shirt from you? Is it purely convenience? Is it ego? Is it profit? You know, what is it? And then how do you go about seamlessly answering those objections through your marketing? And that’s making the customer feel fine. In some cases, you might enter all those questions just simply in the product description, and by the look and feel of your website and how the checkout procedure works. But have one problem with the checkout, and then the whole thing comes crashing down, because security is gone, and you’re a dodgy T-shirt place. You know, like, that’s how it works.

And I think that for a lot of business owners, they don’t know their SPACE motivators. They assume their customer avatar is just one, and it’s not. It’s many, and with different ways that those motivators deal with them. And how do you make sure that your messaging on your website is answering those questions? Or in face-to-face selling, do your salespeople know how to answer those questions?

The guy who sold a boat

You know, years ago, I loved boats. And years ago, I decided I was buying myself a brand new boat for my 40th birthday. And I went to a boat show…

James: Was this last year?

Sonya: Twelve years ago, James.

So, I already had a boat. I really didn’t at this stage have an intention of buying a new boat, but you know, you love going to boat shows. I went to a boat show, saw a boat that I absolutely fell in love with. And then I thought, well, yeah, maybe I can get myself a new boat for my 40th birthday. And so I wandered around the boat show looking at all sorts of boats. No one would talk to me. Only the man at the first boat would talk to me. All the other men were not interested in me, because I was just this girl looking at boats.

Anyway, I ended up buying the boat from this man, and he delivered it for my 40th birthday as promised. His name was Andrew Dunbar. I say that because I don’t even know if he’s still in boats, but he’s a brilliant, brilliant operator. And I said to him, “Andrew, when I bought my boat, you were so genuine to me, you made it so easy.” And he said to me, because the day I looked at the boat, I had a pink jumper on, and he said to me, “I’m going to wrap your boat in a pink bow for your 40th birthday.” I said “Oh, you don’t need to do that.” I said, “But Andrew, you did it so well.” And he said, “Sonya, when a woman walks into my dealership, I take her serious, because she’s either buying a boat for herself, or she’s deciding whether her husband can have one. I don’t get any women tire kicking in my boat dealership. Men? Get a lot of men tire kickers wasting my time, but the women never do.” Every other boat dealer at that boat show, and I would have looked at probably 15 other similar boats, didn’t even talk to me.

So, understand your market. Understand your avatar. Like, that man knew that. He has this avatar, probably middle-aged men who primarily end up buying boats. But he has this segment of, you know, 40-something, 50-something females that they’re buying a boat, or they’re deciding if somebody else can buy a boat. So best to look after them and treat them as intelligent people. And as business owners, I think we forget that sometimes. We just assume we know who our customer is, but we don’t know who the influencers are.

James: It was literally one of the questions on my six questions – who’s the vehicle for? I’d often find out it’s not for the person sitting in front of me, which is very important. And you know, shortly after that, we’d be going for a drive off to do the school run, with the wife doing the school pick-up in the new car. It’s kind of like the puppy dog – it’s hard for them to not buy it after the kids have experienced it. And it handles the driveway and the speed humps just fine.

Sonya: Yes, yes.

In summary

James: What a great conversation. We should wrap this one up in a pink bow, Sonya. So some of the clues from today’s discussion were: you have to have a good handle on your market. If you want a market-led business, you got to know who your customers are, you have to know why they buy, you have to know what your product does for them, not just the logistics of what it looks like when you write it down as a deliverable. What are their results? And how are you going to reach them? What medium is going to get you a high impact? And perhaps, what changes have occurred in the market that you’ve been asleep behind the wheel with, that your competitors have switched on to? Maybe it’s time to make some changes in the way that you market to your customers, and learn from the mistakes of the people who aren’t marketing well. And we’ve given a lot of examples in this call, which I really like a lot. So Sonya, thanks for being so generous.

Sonya: A pleasure, James. I always love chatting to you, as you know. It’s always fun to talk about business.

James: Cool. Well, I’m looking forward to catching up with you a little later this year. We’ll put a full transcription of this episode. I’ve been chatting with Sonya, and Sonya runs a wonderful business called OmnichannelMediaGroup.com and also runs a great event in Australia each year in August in the Gold Coast, DigitalMarketer Down Under. And speak again, Sonya.

Sonya: Okay, thanks James.

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